Although the exact location of the plant remains unconfirmed, it is believed that Audi will produce an SUV model as the automaker prepares itself for production by 2016.

Despite this being very much a first for the Audi brand independently, the larger Volkswagen Group already has an automotive plant in Puebla, an engine plant in Silao (Central Mexico) and plans on building a $500m engine plant in Guanajuato that will supply both VW’s plants in Puebla and in Chattanooga.

Rupert Stadler, Audi chief executive officer, said: 'As an established car making location, Mexico offers an excellent economic basis for Audi production operations. Good infrastructure, competitive cost structures and existing free trade agreements played a significant role in the choice.'